Thursday, November 17, 2011

Today let's go over an advanced technique for making gold in WoW, the manipulation of component pricing. The whole point of manipulating the price of crafting components is to scare off competition from entering your market. This is done by falsely making a craftable item appear to be unprofitable. This technique works on players that can't craft the crafting components themselves and also works on players that use WoW add-ons to tell them what items are profitable and which ones are not.

What Do You Mean By Components?

Crafting components are required in many of the WoW profession crafting recipes. Any craftable item that is used for another crafting recipe is a crafting component. Engineering, while my favorite profession overall, is the most annoying as a crafter. Why? The majority of the most profitable recipes all have multiple components. This leads to extra crafting time, more chances for errors, and a wide variety of crafting material requirements. This is why many Engineers look for the intermediate crafted components on the auction house to save time crafting their finished product.

Here is a great example of a component heavy recipe: Tranquil Mechanical Yeti.

The Tranquil Mechanical Yeti recipe calls for:

1 Cured Rugged Hide

2 Globe of Water

1 Gold Power Core

4 Thorium Widgets

2 Truesilver Transformers

Four of the 5 required items for the Tranquil Mechanical Yeti are crafting components.

Manipulation Of Component Prices

Add-ons like Little Sparky's Workshop and Tradeskill Master's Crafting Module are great add-ons for judging what items are worth crafting. These add-ons help you save time researching and adding up the crafting costs yourself. You can't always trust these add-ons when you are looking at craftable items that take components. The add-ons are going to look at the cost for the components on the auction house when figuring the crafting cost. They don't always break down what the costs would be to craft those components yourself. The Undermine Journal use to do the same thing. It used to show the total crafting cost from add the materials and components together. Now you can safely break down each component to see if you can produce your components cheaper than the already crafted ones that are for sale on the auction house.

Hopefully you already are taking steps to ensure that you are using the cheapest crafting methods to help keep your costs down. Lower costs translate to higher profits and wider profitable pricing options.

A great example of one market I use this strategy in is the Arcanite Rod market.

Doing the quick math based on auction house prices, the Arcanite Rod would not be worth crafting. Little Sparkey's Workshop would tell you that you would lose gold by crafting this item since your investment of 3 75 gold Arcanite Bars is more than the selling price of the Arcanite Rod. A smart goblin will see through this false pricing and know that the item is indeed profitable. By transmuting your own Arcanite Bars with your Alchemist, that price will drop far below the price of buying the component items yourself.

The true crafting cost for the Arcanite Rod would be the total of:

3 Thorium Ore

3 Arcane Crystals

4 Dense Stone

Breaking those component parts down completely to their raw materials and crafting each component yourself will save you a ton of gold. That unprofitable Arcanite Rod is now a very profitable option. Anyone who relies strictly on add-ons or on purchasing components made by others is succeptable to being fooled into passing on this market. I list a lot of components on the auction house for much higher than they cost to craft, just to skew the data that the add-ons collect and to fool unexperienced players looking to invade my markets. Engineering pets is a good market to exploit this technique because of the heavy component requirements for the pets.

Using the earlier example of the Tranquil Mechanical Yeti, you can jack the false market prices up on Gold Power Cores, Truesilver Transformers, and Thorium Widgets to make the Yeti appear unprofitable. I sell Cured Heavy Hides for 75 gold each as well, to scare others away from my Barbaric Bracer market. And when another lazy or uninformed player comes along and buys your components at their stupid high prices, you've just created a new market for yourself with a nice high profit margin.

So today I hope you've learned 3 lessons.

Always look to see if it is cheaper to buy a pre-crafted component off the auction house or if it is cheaper to craft the component yourself.

Play around with some component pricing manipulation and see if you can limit the amount of new competition jumping into your markets.

You have to be smarter than your add-ons. Automation is good, but not always the most accurate.

You're point would be valid if the Arcanite Bar market wasn't saturated. Since I can craft more Arcanite Bars than I can sell in a day, diversifying into another product is an even better approach. By also selling rods I can profit from a seperate market of buyers (enchanters).

In a market that isn't saturated, or one with limited availability, (Like say Khorium markets instead) then we would want to find the most profitable avenue for our rarer raw resources.

When you have more raw materials than required by the demand, then diversifying is you're best bet. Same thing with MFCs and Fortune Cookies. Cookies may sell for more, but you should be single single MFCs too because of the sheer volume.

As usual a good post that shows how to watch the structure of a market from raw material through work in progress towards the finished goods. Teaches us all to watch the complete market chain for pricing anomalies.

However, is it a desirable feature to deliberately attempt to manipulate the market in this way? Could this be construed as market manipulation?